Germany clinches MoU for LNG supplies
The German government has entered a memorandum of understanding (MoU) with energy firms Uniper, RWE, EnBW and VNG on supplying the forthcoming Wilhelmshaven and Brunsbuttel floating LNG import terminals with gas from the launch this winter until March 2024.
The deal was announced August 16 in a press event held by Robert Habeck, the German federal minister for economic affairs and climate action. Habeck said he expected Germany to begin receiving LNG under the agreements before the turn of the year. By March 2024, he expects the suppliers to fill the entire capacity of FSRUs stationed at both LNG terminals.
Berlin is spending €3bn ($3.2bn) over the next decade to deliver four proposed floating LNG projects, with Wilhelmshaven and Brunsbuttel set to be delivered first. The schedule for Brunsbuttel was announced July 20, and envisages an initial 3.5bn m3 /yr phase entering service from the turn of 2022/23.
Wilhelmshaven is set to host a 10bn m3/yr regasification capacity terminal built by Uniper, while a second FSRU by Tree Energy would subsequently add a further 2.2bn m3/yr capacity in the same region. A fourth 12bn m3/yr terminal by Hanseatic Energy Hub is being developed in Stade.
Habeck said: "We are working flat out to ensure that these plans are implemented so that at the turn of the year we have two regasification ships, or floating LNG terminals, so to speak, [ready] at the [Brunsbuttel and Wilhelmshaven] locations."
Habeck noted Germany has "no alternative gas infrastructure" leaving it heavily exposed to the curtailment of Russian gas transport, with few links to gas sourced from its European neighbours. German chancellor Olaf Scholz on August 11 called for the construction of a new pipeline from Portugal to central Europe, bolstering access to the Iberian peninsula's under-utilised LNG regasification capacity.
While Germany has been eager to secure LNG supplies for its planned terminals, it has been reluctant to enter into long-term contracts, wary not to undermine its climate plans which include reductions in gas use over the coming decades. This has made it harder for Berlin to lock in supplies amid competition from Asian buyers.